WHAT EMPLOYEES AND MANAGERS CAN DO ABOUT PAY DISSATISFACTION

FRANK (THE ASSISTANT) SAYS:

"Sandy, I don't think it's fair that I received the same pay raise as everyone else. You and I both know that my performance is better than that of anyone else at my level.

SANDY (THE MANAGER) SAYS:

"We are all part of a well-functioning team here. We have many very good performers. Also, we only have a budget of three percent for pay increases. In order to give some people more than three percent, we would have to give others less than three percent. That would be very demoralizing to some people and would hurt the team."

DILEMMA:

The assistant does not feel his good performance is adequately recognized. The manager would like to pay him more but has been ordered by senior management to give the same across-the-board pay increase to everyone.

TYPICAL SCENARIO:
"Frank, please come to my office at 10:00 AM for your annual performance and salary reviews." Later that morning in Sandy's office, Sandy said to Frank: "Your performance this year has been excellent. You are a top performer in the department. I gave you an excellent rating on all ten rating scales. Unfortunately, this year we only have three percent in the budget for salary increases. Therefore, the management team decided to give everyone in the department a three- percent pay raise. Your raise will appear in your paycheck effective the first of next month. Do you have any questions?"

SOLUTION: WHAT THE ASSISTANT CAN DO.

Here are some additional things that Sandy can do.

• Be professional.

  Frank needs to understand Sandy's position and work with her to develop a win-win situation. He needs to step back and be objective rather than emotional in his approach.

• Negotiate.

  Frank can negotiate for perquisites (perks) outside of the across-the-board three percent pay raise. He needs to be creative in thinking about other resources that he can tap into other than the salary budget. Perhaps there is special training he'd like to receive (maybe in a fun, out-of-town location), or a plum assignment (like working the next company trade show booth in Las Vegas), or maybe a new software package.

• Build a case for a higher raise.

  For the future, Frank needs to start documenting everything he does that is above-and-beyond his job description. He needs to keep a folder for this purpose. He can include notes from projects he initiated, outside-of-the-ordinary projects and tasks he performed, and any added value that his efforts produced. He should also write summaries of any courses he takes and document any new skills he learns. Prior to his next performance review, he can write a memo to Sandy citing this data.

• Re-evaluate his position.

  Frank needs to be realistic and take a long-range approach to his career. Perhaps there is another role he can take within the company that can fulfill his career goals. If he truly feels unappreciated and cannot remedy the situation, then he needs to start planning for a new job.

SOLUTION: WHAT THE MANAGER CAN DO.

Sandy and Frank have encountered a common dilemma of the workplace. Our employee survey research, with over 40 participating organizations, has revealed that 71 percent of employees do not feel that there is a clear link between good job performance and pay increases in their organization. Here are some things that Sandy can do:

• Recognize that pay is not the major reason people stay committed to their organization.

  Many managers fear that by not appropriately rewarding good performance, the best employees will leave the organization or that good performers will lose their motivation. These fears are usually not justified. Employee commitment is due to many factors: their belief in the mission of the organization; their relationships with coworkers; their relationship with their supervisor;and their love of the actual work that they perform.

• Provide more recognition.

  Sandy should do a better job of providing timely thank-yous and "atta-boys" to Frank. For most employees, ongoing recognition by their supervisor for good work is more important than pay. Our research shows that 67 percent of employees do not feel that they receive enough ongoing feedback about their job performance from their supervisor.

• Provide other types of rewards.

  There are other types of valued rewards for employees that supervisors can use for good performers in lieu of pay increases. For example, Sandy could periodically offer Frank time off, spot bonuses, plum assignments, and special training.

• Properly deal with ineffective performers.

  It can be difficult for good performers to accept the fact that poor performers are receiving the same pay or same pay increases. Our research shows that 63 percent of employees feel that poor performance is tolerated in their companies. Sandy needs to identify and appropriately retrain, discipline, or dismiss these employees from her department.

CONCLUSION :

Pay dissatisfaction is a challenge both for employees and their managers. Coming to a solution requires both parties to identify what is most important to them, negotiate carefully, and maintain an open dialogue. They must also think outside of the box. Pay dissatisfaction can be symptomatic of other problems. Often the best solution is something other than merely more money.